Here’s why female Uber drivers make 7% less than males

06 Feb Here’s why female Uber drivers make 7% less than males

A new study (that Uber helped produce) isn’t going to help the ride-hailing service’s reputation. It shows that male drivers earn on average 7% more than their female counterparts. Since Uber’s pay algorithm is gender-agnostic, the researchers had to figure out what else was at play. Here’s the three reasons why this happens:

• Women have a higher attrition rate than men on the platform.  About 65% of male drivers leave the Uber platform after six months. By contrast, 76.5% of women leave after the same period. Women also drive fewer hours per week than men. “A driver with more than 2,500 lifetime trips completed earns 14% more per hour than a driver who has completed fewer than 100 trips in her time on the platform,” the study’s authors wrote, “in part because she learn[s] where to drive, when to drive, and how to strategically cancel and accept trips.”

• Men drive more lucrative routes during more profitable times. 

• Men drive faster, which means they complete more trips than women.  

The study also concludes that, “The preference differences that contribute to pay differences in professional markets for lawyers and MBAs also lead to earnings gaps for drivers on Uber, suggesting they are pervasive across the skill distribution and whether in the traditional or gig workplace.”

The study doesn’t delve into why men and women are making the decisions they’re making, only that these are their choices. Outside research will tell you women may be choosing less profitable work hours or locations because of constraints beyond their control. They might only be able to work while their children are at school, for example. Women may be socially incentivized to make labor choices that are ultimately less lucrative than men make (this argument is the crux of Harvard professor Claudia Goldin’s work, which I highly recommend).

These factors make earnings equality a more complex problem to solve. “I think this is showing that the gender pay gap is not likely to go away completely anytime soon,” says Rebecca Diamond, a professor of economics at Stanford University and a researcher on this study, in a conversation with Freakonomics. “Unless somehow, things in our broader society really change, about how men and women are making choices about their broader lives, than just the labor market.”

Source: Fast Company